Roopa Screen’s IPO: Strong Profits and Clean Structure

1. IPO Overview

Roopa Screen Limited is raising up to 30,00,000 shares in a 100% fresh issue, with no offer for sale (OFS, meaning no existing owner is selling), on the BSE SME platform.

At the live band of Rs 60 to Rs 64 a share, the fresh raise is about Rs 18 crore to Rs 19.20 crore and post-issue market value is Rs 66.41 cr to Rs 70.83 cr.

Pre-issue capital is 80,67,500 shares and post-issue capital will be up to 1,10,67,500 shares, while promoter holding falls from 87.40% to 63.71% with no promoter exit.

The issue opens on September 24, 2026 and closes on September 28, 2026, with Seren Capital as lead manager and Bigshare as registrar.

On post-issue earnings for the year ended March 31, 2026, the band implies a P/E (price to earnings multiple) of 10.2x to 10.9x, with pre-issue return on net worth (RoNW, profit as a share of closing net worth) at 39.60%.

2. What the company does

A consumable stencil for textile printers

Roopa Screen, incorporated in 2013, makes rotary nickel screens that work as cylindrical metal stencils inside textile printing machines. Paste is pushed through tiny holes in the cylinder to print patterns continuously on fabric. The screen wears with use and must be replaced, so demand is recurring rather than one-off. The company also trades nickel cathodes, the key metal used to make screens, mainly to support its own manufacturing.

How a screen is made and sold

Nickel cathodes, nickel salts, boric acid and other chemicals are bought largely from Gujarat and Maharashtra. A steel mandrel is cleaned, polished and copper-plated to create a conductive base. That layer is etched to form the perforation pattern, hardened with chrome and then built up with nickel for strength and flexibility. Each screen is dried, checked for mesh uniformity, thickness and finish, then packed and dispatched.

Sales are direct business-to-business through a seven-person team that helps buyers select mesh and troubleshoot printing. The factory is at Sanand in Ahmedabad, with a godown at Surat and a sales depot at Panipat in Haryana. Buyers pay by variant and mesh, plus a small freight charge.

What it sells: four screens plus traded metal

The company reports a single segment, Rotary Nickel Screen, sold as four variants plus ancillary trading. Standard screens are general-purpose products in 40 to 110 mesh. Delta screens in 155 mesh target fine and detailed printing. Penta screens in 125 mesh allow heavy paste flow for backgrounds and bold patterns. Nova screens in 135, 165 and 195 mesh promise longer life for fine work.

Penta is the concentration risk, at 38.54% of revenue from operations in FY26 and above 39% in the prior two years. Trading has grown from 1.29% to 16.91% of product sales in two years. It adds volume but earns almost no value addition and moves with London nickel prices and currency.

Who buys and where

Customers are textile printing units that consume screens continuously, plus a small tail in chemicals, dyes and engineering. There are no long-term contracts and no order book, so growth rests on repeat buying and new customers. Total customers were 210 in FY26, down from 228 in FY25 and 205 in FY24, which means revenue per customer rose as the base narrowed.

The top 10 buyers took 34.53% of revenue from operations in FY26, up from 27.22% in FY25 and 33.40% in FY24. No single buyer crossed 10%, with the largest at 6.43% in FY26. Sales to promoter-linked Roopa Engineers were only Rs 73.40 lakhs, or about 1.45% of revenue in FY26.

Sales are almost entirely domestic across 11 states, with a first export of Rs 15.63 lakhs to Sri Lanka in FY26. Gujarat was 58.93% of FY26 revenue, followed by Maharashtra at 17.30%, Haryana at 11.31%, Punjab at 6.72% and Tamil Nadu at 2.32%. The top five states together were 96.58%, which ties fortunes to western India textile cycles.

Capacity is the ceiling

Sanand can make 74,400 screens a year and produced 71,800 screens in FY26, or 96.51% utilisation. That compares with 80.93% in FY25 and 83.38% in FY24. The older Narol unit was closed as a factory in December 2025 and is now a warehouse and registered office. With the plant effectively full, further manufacturing growth needs price, mix or new capacity.

3. Use of Funds

The entire issue is fresh capital, so all net proceeds go to the company and there are no OFS proceeds to selling shareholders.

• Funding a new manufacturing facility at Plot No. 191, Sanand: Rs 9.90 crore
• Funding working capital requirements: Rs 6.00 crore
• General corporate purposes: amount not disclosed

The new plant would lift capacity to about 163,200 screens a year and add large 1,018 mm screens. No orders have yet been placed for plant and electricals, with only quotations in hand.

4. Financials Overview

All figures below are restated for 12 months ended March 31, in Rs in crore, for the standalone company with no subsidiary.

Revenue grew 27.0% in FY25 and 11.9% in FY26, while EBITDA margin rose from 11.87% to 19.72% and PAT margin tripled. Returns peaked in FY25 on a smaller equity base and eased in FY26 as equity expanded.

5. What the financials tell us

Roopa is a simple standalone business with no group to untangle. Its recent sales and profit jump, however, lean on cheap nickel and thin trading rather than faster screen making. Cash has not followed profit, and funding has shifted to loans that can be called on demand.

You buy one company, nothing hidden

The company states it has no subsidiary, associate, joint venture or group company, so reported profit is owner profit. PAT was Rs 6.48 crore in FY26, Rs 4.69 crore in FY25 and Rs 1.50 crore in FY24 on that single-entity basis. Related sales to Roopa Engineers were only about Rs 73.40 lakhs in FY26, so earnings are not propped by intra-group buying.

That clean structure helps valuation because there is no minority interest to adjust. It also means attention can stay on earnings quality and liquidity, where the real questions lie.

Sales growth rides thin trading, not screens

Total revenue rose from about Rs 35.71 crore to Rs 50.73 crore in two years, but core manufactured screens grew only about 13.4% and then 5.5%. Traded nickel jumped from Rs 45.96 lakhs to Rs 8.56 crore over the same period. In FY26 the company bought trading stock for about Rs 8.26 crore to sell it for Rs 8.56 crore.

The gap between buy and sell price is therefore very thin, so trading adds headline volume with little gross profit. An investor paying for growth is largely paying for metal pass-through that depends on nickel availability and price.

Flat material cost explains the profit jump

Cost of material consumed stayed roughly flat at about Rs 23.88 crore in FY26 versus Rs 24.37 crore in FY24, while manufactured sales rose by nearly a fifth. Management itself links the saving to favourable and lower average nickel prices. Other income also rose to Rs 59.28 lakhs in FY26, including a Rs 26.27 lakhs government interest subsidy seen only that year.

The result was PAT margin expansion from 4.21% to about 12.78% and lower finance costs as term loans were repaid. If nickel reverses or the subsidy does not repeat, a large part of that margin gain could unwind.

One supplier holds the key

The top supplier rose from 41.60% of purchases in FY24 to about 56.35% in FY26, worth Rs 18.91 crore. The top 10 suppliers together were 96.73% of purchases in FY26. By contrast the top customer was only 6.43% of revenue and no customer exceeded 10%.

The bottleneck is therefore entirely on buying, not selling. Loss or repricing by that one nickel source would hit manufacturing and trading at the same time, leaving little bargaining power.

Profits have not become cash

FY26 PAT of Rs 6.48 crore produced operating cash flow of only Rs 2.85 crore, or about 44 paise per rupee of profit. Receivables rose from Rs 7.02 crore to Rs 12.78 crore in two years as collection stretched from about 72 to 92 days. Inventories jumped to Rs 6.98 crore in FY26, led by finished goods of Rs 3.71 crore and raw materials of Rs 3.06 crore.

Operating profit before working capital kept rising while cash from operations fell, because receivables and stock absorbed the gain. Year-end cash was only Rs 6.80 lakhs, so further growth without collection will need outside funding.

Debt is now callable

Total borrowings sit in the IPO company itself and maturity has shortened sharply. Long-term borrowings fell from Rs 7.67 crore to Rs 74.40 lakhs, while short-term borrowings rose from Rs 1.31 crore to Rs 6.67 crore. That short pile includes cash credit up from Rs 6.29 lakhs to Rs 2.65 crore and Rs 3.40 crore of director loans payable on demand.

Headline leverage looks better, but liquidity risk has risen because the debt must be rolled or repaid if demanded. None of the IPO money is earmarked to repay borrowings, and bank debt carries personal guarantees from all four promoter directors.

6. Valuation Analysis

For a profitable operating maker like Roopa, earnings are the right lens, with book and cash as checks. At the top of the band, Rs 64 a share, the company is valued at Rs 70.83 cr on up to 1,10,67,500 post-issue shares.

On reported FY26 PAT of Rs 6.48 cr, post-issue P/E is 10.2x at Rs 60 and 10.9x at Rs 64. On adjusted PAT that removes the subsidy effect, it is 10.6x to 11.3x. Post-issue book is 1.9x to 2.0x, with NAV per share of Rs 31.06 at the floor and Rs 32.14 at the cap versus Rs 20.30 pre-issue.

That is about 78% to 80% cheaper than Stovec Industries at 50.54x, and 84% to 85% cheaper on the pre-issue EPS of Rs 8.04 that matches the prospectus basis. The direction of a discount is warranted for a smaller, single-plant, textile-only business, but the size is not earned as value.

Stovec trades on trough calendar 2025 earnings after a revenue fall, while Roopa trades on peak March 2026 earnings helped by cheap nickel, thin trading volume and a one-year subsidy. After adjusting for non-cash collection, supplier concentration and callable funding, the optical cheapness compensates for risk rather than proving a bargain.

7. Peer Analysis

Source: RHP — Set forth below are the details of comparison of key performance of indicators with our listed industry peer; pages 96-97.

Roopa grew revenue in both years while Stovec grew then fell 15.54% in calendar 2025. Roopa margins expanded steadily as material cost stayed flat on favourable nickel and utilisation hit 96.51%, while Stovec margins compressed on lower volume. Returns peaked for both in the middle year, but Roopa stayed far higher in level.

The businesses are not strictly comparable, as the prospectus itself warns. Roopa is a single-cluster screen maker plus nickel trading, while Stovec sells rotary systems, digital machines and consumables at about 3.9 times Roopa revenue. Customer, capacity and cost details for Stovec are not disclosed, and periods do not align with March versus December year-ends.

On financials, Roopa leads on growth, margins and returns but lags on quality. Operating cash was only Rs 2.85 crore against PAT of Rs 6.48 crore, inventories surged 70.6%, receivables sit at 92 days, and Rs 3.40 crore of director loans are callable. None of those pressures are disclosed for Stovec, so they look idiosyncratic to Roopa rather than industry-wide, though textile cyclicality affects both.

Overall, the near 80% P/E discount reflects peak-versus-trough earnings, scale, concentration and execution risk on an unordered expansion, not a proven value gap.

Note: peer valuation figures above come from the peer's own financial results and exchange price, while Roopa figures come from its DRHP — except the growth and profitability table, where both sides come from the DRHP.

8. Moat

Roopa has execution reliability rather than a durable moat. In-house testing and five-year ties with more than 200 buyers support repeat orders, but Penta dependence, almost-all textile exposure, no long-term contracts, 96.73% purchase concentration and leased promoter premises leave the edge narrow and replicable.

9. Risks

• Single plant and textile cycle: All output must flow through Sanand until the new unit commissions, so any breakdown, power cut or textile slowdown directly hits sales. This is idiosyncratic and has risen as utilisation reached 96.51%.
• Product and customer squeeze: Penta at 38.54% of revenue and top 10 buyers at 34.53% mean a preference shift or loss of a few buyers swings revenue, especially with no firm commitments. Concentration rebounded in FY26.
• Nickel and supplier grip: With one supplier at 56.35% and no long-term supply deals, shortage or price spikes cannot always be passed on. This idiosyncratic risk grew as trading raised nickel exposure.
• Cash locked in working capital: Receivables of Rs 12.78 crore and inventories of Rs 6.98 crore force reliance on cash credit and on-demand director loans. The Rs 6.00 crore IPO working-capital infusion buffers but does not remove the pressure.
• Approvals, guarantees and dues: Narol ran without factory approvals, the trademark is opposed, a Rs 33.38 lakhs GST demand is pending, and promoter guarantees back bank debt. These governance overhangs are idiosyncratic and stay with new shareholders.

10. Verdict

The call rests on four load-bearing facts: core screen growth slowed while trading drove most of the FY26 increment at wafer margins; profit tripled because material cost stayed flat on favourable nickel plus a FY26-only subsidy; cash conversion stayed near 44 paise with receivables at 92 days and thin year-end cash; and debt is now largely short-term and callable while IPO money funds capex, not repayment.

Those facts point to peak, nickel-assisted earnings that have not turned into cash, so paying 10.2x to 10.9x post-issue on reported profit assumes durability that collection, supplier and capacity evidence does not yet confirm. The thesis works only if new Sanand capacity fills with manufacturing screens at similar realisations while receivable and inventory days retreat; it breaks if nickel reverses, trading swells further, or callable loans are demanded before cash improves.

11. IPO Snapshot